2007: The Year of the Data Center
2007 was the year in which the data center moved from the back-end to the front page. The data center has become the focal point for fundamental changes in computing, involving massive shifts toward cloud computing platforms and a more energy-efficient, virtualized infrastructure. These trends will continue to drive infrastructure investment in coming years, both in the form of huge data centers and massive spending on hardware and software to save money and energy as IT operations expand their scale.
Here are our picks for the top data center trends and stories of 2007:
- 1. The Data Center Arms Race: Google (GOOG) and Microsoft (MSFT) provided a very public face for the push toward mega-data centers, as the two Internet giants announced more than $4 billion in data center projects. Google unveiled plans for $600 million data centers in four sites: Lenoir, North Carolina, Goose Creek, South Carolina, Pryor, Oklahoma and Council Bluffs, Iowa. Not to be outdone, Microsoft announced $500 million data center construction projects in San Antonio, Texas, Northlake, Illinois and Dublin, Ireland. These projects were the tip of much larger iceberg, as data center specialists continued their building boom. Companies with prominent construction projects included Equinix (EQIX), Digital Realty Trust (DLR), DuPont Fabros (DFT) Terremark (TMRK) and 365 Main, while Savvis (SVVS), Switch and Data (SDXC) and CRG West either retrofitted or expanded existing space.
- 2. More Power, Scotty! Rising power loads are remaking the geography of the industry, the design of facilities and the landscape of neighborhoods in data center hubs like northern Virginia. The availability of cheap power – and lots of it – has become a major data center site selection criteria, boosting the fortunes of Quincy, Washington and San Antonio. Power capacity is a key criteria for new facilities, with some provisioning as much as 225 megawatts for growing projects. Those power loads also continue to drive demand for diesel generators, as DuPont Fabros opened a site using 32 generators, and Google is planning for 38 backup generators for its Iowa project.
- 3. Data Center Virtualization: It’s been a huge year for data center virtualization, as a growing number of enterprises are pursuing virtualization projects as they consolidate servers and data centers. Market leader VMware (VMW) had one of the most successful IPOs of the year, and other providers are targeting the data center in hopes of their own virtualization windfall.
- 4. Greening the Data Center: It was often hard to separate the substance from the hype, but it’s clear that energy efficiency in data centers is a trend with legs. IBM’s Big Green announcement in May opened the floodgates on green data center marketing, but the push towards energy efficiency began much earlier, and is focused on the bottom line – green as in dollars, not eco-friendliness. The two intersect neatly in LEED data centers, which have become a growth market for vendors and operators.
- 5. Data Center Downtime: Uptime never gets boring. Unfortunately, a string of high-profile outages highlighted the many ways data centers can experience failures, and offered lessons for the industry in managing the technical and public relations aspects of failures.
- 6. Amazon and Utility Computing: There are lots of players in the emerging utility infrastructure market, but the Amazon (AMZN) suite of web services has captured media attention and provided high-profile case studies in the potential for utility hosting. In November Amazon addressed performance problems by introducing an SLA.
- 7. Cooling Heats Up: Many folks may not think of HVAC as exciting. Not so in 2007, as there were major acquisitions (APC and Trane), vigorous discussion (and some adoption) of liquid cooling and higher set points, and even efforts by NASA and others to adopt space technology for data center cooling.
- 8. AC versus DC: As industry heavyweights take aim at data center energy efficiency, the relative merit of AC versus DC for power distribution is the sharpest debate in a larger series of issues that the industry is grappling with as it seeks to define standards for improved energy efficiency.
- 9. Video Changes Everything: While some issues divide data center professionals, the one trend that just about everyone can agree on is that the emergence of online video is driving huge demand for bandwidth and IP infrastructure, and will continue to do so for some time to come.
- 10. Portable Data Centers: The “data center in a box” concept has yet to take over the world, but continues to generate interest. Sun’s Project Blackbox saw its first installation, while Rackable refined its ICE Cube concept. Industry giants like Microsoft and Intel are apparently considering portable data centers for future deployment.
Have we missed anything? Share your thoughts and opinions in the comments.
These trends are spot on!
I think one trend that is missing that will become even more significant in 2008 is that data center companies will need to work harder to differentiate their services from their competitors.
In the past few years the supply/demand equation has worked to data center providers’ benefit. Now it is starting to level off.
In addition to virtualization, power management, and security, I believe that IP Networking can be a way for data center suppliers to differentiate themselves.
The carrier neutral model is well understood and valued in the marketplace, but it’s not enough anymore. We need to enhance and extend that model to include route optimized IP networking.
My company, Internap, has made announcements with two leading hosting companies, Quality Technology Services (QTS) and SoftLayer, in the last few months which are the first steps in this direction. We want to do more.
An excellent overview of the year. Is there a trend towards moving datacentre activity overseas from the US? Which countries saw a sharp increase in datacentre capacity? Are environmental concerns pushing this trend?